INSUBCONTINENT EXCLUSIVE:
5 min read Last Updated : Sep 18 2024 | 12:28 AM IST
Budget airline SpiceJet on Tuesday revealed that it did not pay statutory dues
The unpaid dues include Rs 219.8 crore in tax deducted at source (TDS), Rs 71.33 crore in goods and services tax (GST), and Rs 135.47 crore
to Rs 3,000 crore through a qualified institutional placement (QIP) process at a floor price of Rs 64.79 per share.
In addition to the
statutory dues, SpiceJet said it owed Rs 118.9 crore to its employees as on September 15, 2024, which it plans to clear using funds from the
said: "As a listed company, SpiceJet operates with full transparency, and all relevant financial information, including statutory dues, is
available in the public domain
Due to financial constraints, we have had delays in payment but we are fully committed to clearing our dues as soon as possible
The QIP document submitted already outlines how the funds raised will be utilised, including towards clearing statutory dues."
Legal
experts told Business Standard that failing to remit GST is a serious offence because the tax has already been collected from customers but
Some of these are taxes which have been collected and need to be paid, such as the GST
secretary, highlighted the potential legal consequences, noting that penalties and interest could be imposed on those responsible
under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, it faces penalties, including interest on delayed payments,
damages of up to 100 per cent of the unpaid amount, and legal action
The company's responsible officers may face imprisonment of up to 3 years and fines, if there are willful defaults
Of the QIP proceeds, Rs 601.5 crore will be used to settle statutory dues, Rs 750 crore will go towards clearing liabilities to lessors and
wonder about the possibility of these issues recurring, Joshi said.
The airline in its filing mentioned about the resignation of its
former chief financial officer, Ashish Kumar, in July, and said a replacement has yet to be found.
As on June 30, 2024, SpiceJet employed
7,824 full-time staff but reported negative retained earnings (or accumulated deficit) of Rs 7,728 crore and a negative net worth of Rs
further noted that there have been instances of notices, warnings and action being initiated against the airline on account of certain
lapses in regulatory compliances
Chandwani, a partner at KS Legal - Associates, noted that the airline could face legal challenges over unpaid dues and operational
Additionally, the government might start exerting pressure for recovery, along with lenders and lessors
The airline has struggled with losses for the past six years and has faced challenges in paying staff salaries.First Published: Sep 17 2024
